MINUTES OF A MEETING OF THE COUNCIL HELD AT COUNTY HALL, NEWPORT, ISLE OF WIGHT ON WEDNESDAY, 22 FEBRUARY 2005 COMMENCING AT 10.00 AM

Present :

Mrs M A Jarman (Chairman), Mr B E Abraham, Mr J R Adams, Mr R R Barry, Mr A C Bartlett, Mr J A Bowker, Mrs T M Butchers, Mr C B Chapman, Mrs B D Clough, Mr M J Cunningham, Mr J Effemey, Mr J H Fleming, Mrs B E Foster, Mr E Fox, Mrs D Gardiner, Mr C M Gauntlett, Mr C R Hancock, Mr P G Harris, Mr J F Howe, Miss H L Humby, Mr P D Joyce, Mr G S Kendall, Mr D J Knowles, Mrs B Lawson, Mr C H Lillywhite, Mrs M J Lloyd, Mr R G Mazillius, Mr A J Mellor, Mrs M J Miller, Mr V J Morey, M Mr M O Morgan Huws, Mr A J Mundy, Mrs L J Peacey-Willcox Mr K Pearson, Mr G P Price, Mr H Rees, Mr R C Richards, Mrs S A Smart, Mr I R Stephens, Mr R A Sutton, Mr A A Taylor, Mrs J L Wareham, Mr D G Williams

Apologies :

Mr A C Coburn, Mrs E Oulton, Mrs J White, Mr J A M D Whittaker, Mr D T Yates

81. MINUTES

RESOLVED :

THAT the Minutes of the meeting held on 19 January 2005 be confirmed, subject to minute 77 and 79 corrected to read Chief Executive Officer.

82. DECLARATIONS OF INTEREST

There were no declarations of interest.

83. PUBLIC QUESTION TIME

Questions were put to the Chairman as follows:-

Mrs M Swan of Newport asked an oral question in relation to the cost to the LEA per pupil, per annum (PQ 02/05)

A copy of the question and reply given are contained in the Public Question Register.

Mr J Wortham asked an oral question relating to Council expenditure on Consultancy fees. The Portfolio Holder for Resources replied.

Mrs A Hewitt asked an oral question relating to the Council’s assessment process towards Consultancy commission. The Portfolio Holder for Resources replied.

84. CHAIRMAN’S REPORT

A letter from Clarence House had been received thanking the Chairman for her congratulations on behalf of the Isle of Wight on the announcement of the marriage of His Royal Highness the Prince of Wales to Mrs Camilla Parker-Bowles.

The Chairman reminded Members that a charity event whose theme would be a murder-mystery would take place on 3 March 2005.

85. MOTION SUBMITTED UNDER PROCEDURE RULE 11 BY THE CHAIRMAN

The Council considered the following motion from the Chairman:

“To bestow the honorary freedom of the Isle of Wight upon Ellen MacArthur in grateful recognition of the outstanding way she has brought the good name of the Isle of Wight into world-wide prominence”

During the debate to move the motion Mr Mazillius moved the following amendment to the motion:

“To bestow the honorary freedom of the Isle of Wight upon Ellen MacArthur in grateful recognition of the outstanding way she has brought the sport of ocean sailing and the good name of the Isle of Wight into world-wide prominence”

The motion as amended was seconded, upon voting the motion was adopted.

86. SUSPENSION OF PROCEDURE RULE 15 (4)

It was moved by the Chairman and seconded and

RESOLVED :

THAT Procedure Rule No 15 (4) be suspended to the extent of permitting the Leaders of the Political Groups to speak for longer than the prescribed period specified therein and allow Group Leaders of the Authority to speak for no more than 15 minutes during the debate on the budget.

87. COUNCIL’S REVENUE AND CAPITAL BUDGET AND TREASURY STRATEGY FOR 2005/06

Prior to the debate on this item the Chief Financial Officer gave a presentation to the Council on the Council budget.

Following the presentation the Leader moved a budget motion as recommended by the Executive held earlier the same morning and circulated to Members’ at the meeting. The motion was seconded by Mr R R Barry.

Mr Sutton then moved an amendment which was seconded by Mr Joyce and this was circulated at the meeting.

The meeting then adjourned for 30 minutes to enable Members to receive a more detailed assessment of the Conservative amendment.

Following the adjournment the debate continued. At the request of Mr Mazillius the meeting adjourned for a short while to enable Members to receive a further assessment of the recommendations of the Executive and the Conservative amendment.

The debate continued and the amendment was put to the vote and lost.

Mr Mellor then moved an amendment that the budget retains Members allowances at the current level. The amendment was seconded by Mr Pearson and put to the vote and lost.

The voting returned to the substantive motion and it was

RESOLVED

(i) That the revised estimates for 2004/05 as set out in Appendix 2 be approved.

(ii) The revenue estimates for 2005/06 be £168,449,000 allocated to Service Units as set out in Appendix 2

(iii) That a Schools Budget of at least £64,094,041 be set for 2005/6 exclusive of the LSC allocation.

(iv) That the Schools Budget shares be determined by the Strategic Director for Children’s Services within the approved service budget.

(v) That the three year Council tax projection as set out in Appendix 3 be approved for planning purposes.

(vi) That the recommendations of the Executive in respect of the 2005/08 capital programme, prudential indicators and treasury strategy, as set out in Paper B be approved and that authority be delegated to the Executive to determine the capital programme within the limit of available resources, having given consideration to the views of Select Committees, and thereafter for the Directors Group to manage the programme from day to day within available resources and subject to any direction from the Executive.

(vii) That a contingency of £2 million of unsupported capital borrowing be approved, for use in the event of planned capital receipts not being received, for projects which would be self financing or profit making over the medium term, or for the purchase of plant & equipment where purchase is identified as the most economic option. Any projects to be funded to have the prior approval of the Executive.

(viii) That it be noted that the Council calculated the amounts for the year 2005/06 in accordance with regulations made under Section 33(5) of the Local Government Finance Act 1992 (The Tax Base) ix) That the amounts now calculated by the Council for the year 2005/06 in accordance with Sections 32 to 36 of the Local Government Act 1992 be as set out in Appendix 1.

(ix) That it be noted that for the year 2005/06 the Hampshire Police Authority has stated the following amounts in Precepts issued to the Council, in accordance with Section 40 of the Local Government Finance Act 1992, for each of the categories of dwellings below:

Valuation Bands		Precepting Authority
Band	A	75.84
Band	B	88.48
Band	C	101.12
Band	D	113.76
Band	E	139.04
Band	F	164.32
Band	G	189.60
Band	H	227.52

(x) THAT, having calculated the aggregate in each case of the amounts at paragraph x) above and paragraphs e) & g) of Appendix 1, the Council, in accordance with Section 30(2) of the Local Government Finance Act 1992, hereby sets the following amounts as the amounts of Council Tax for the year 2005/06 for each of the following categories of dwelling shown: -

Council Tax Banding Calculation 2005/06
Including Police Precept
	A	A	B	C	D	E	F	G	H
	(Disabled
	Reduction)
Arreton	690.82	828.99	967.15	1,105.32	1,243.48	1,519.81	1,796.14	2,072.47	2,486.96
Bembridge	704.30	845.16	986.02	1,126.88	1,267.74	1,549.46	1,831.18	2,112.90	2,535.48
Brading	705.16	846.19	987.23	1,128.26	1,269.29	1,551.36	1,833.42	2,115.49	2,538.58
Brighstone	691.50	829.80	968.10	1,106.40	1,244.70	1,521.30	1,797.90	2,074.50	2,489.40
Calbourne	695.53	834.63	973.74	1,112.85	1,251.95	1,530.16	1,808.37	2,086.59	2,503.90
Chale	698.36	838.03	977.70	1,117.37	1,257.04	1,536.38	1,815.73	2,095.07	2,514.08
Cowes	695.45	834.54	973.63	1,112.72	1,251.81	1,529.99	1,808.17	2,086.35	2,503.62
East Cowes	698.32	837.98	977.64	1,117.31	1,256.97	1,536.30	1,815.62	2,094.95	2,513.94
Freshwater	697.05	836.46	975.87	1,115.28	1,254.69	1,533.51	1,812.33	2,091.15	2,509.38
Gatcombe	694.60	833.52	972.44	1,111.36	1,250.28	1,528.12	1,805.96	2,083.80	2,500.56
Godshill	693.79	832.55	971.31	1,110.06	1,248.82	1,526.34	1,803.85	2,081.37	2,497.64
Gurnard	699.30	839.16	979.02	1,118.88	1,258.74	1,538.46	1,818.18	2,097.90	2,517.48
Lake	695.86	835.03	974.21	1,113.38	1,252.55	1,530.90	1,809.24	2,087.59	2,505.10
Nettlestone & Seaview	693.17	831.81	970.44	1,109.08	1,247.71	1,524.98	1,802.25	2,079.52	2,495.42
Newchurch	689.94	827.93	965.92	1,103.90	1,241.89	1,517.87	1,793.84	2,069.82	2,483.78
Niton & Whitwell	691.93	830.31	968.70	1,107.09	1,245.47	1,522.24	1,799.01	2,075.79	2,490.94
Rookley	696.18	835.41	974.65	1,113.89	1,253.12	1,531.59	1,810.06	2,088.54	2,506.24
Sandown	700.95	841.14	981.33	1,121.52	1,261.71	1,542.09	1,822.47	2,102.85	2,523.42
Shalfleet	693.37	832.05	970.72	1,109.40	1,248.07	1,525.42	1,802.77	2,080.12	2,496.14
Shanklin	693.89	832.67	971.45	1,110.22	1,249.00	1,526.56	1,804.11	2,081.67	2,498.00
Shorwell	691.73	830.08	968.43	1,106.77	1,245.12	1,521.81	1,798.51	2,075.20	2,490.24
St Helens	695.58	834.69	973.81	1,112.93	1,252.04	1,530.27	1,808.50	2,086.74	2,504.08
Totland	698.44	838.13	977.82	1,117.50	1,257.19	1,536.57	1,815.94	2,095.32	2,514.38
Ventnor	702.42	842.91	983.39	1,123.88	1,264.36	1,545.33	1,826.30	2,107.27	2,528.72
Wootton	699.16	838.99	978.82	1,118.65	1,258.48	1,538.14	1,817.81	2,097.47	2,516.96
Wroxall	692.73	831.28	969.83	1,108.37	1,246.92	1,524.01	1,801.11	2,078.20	2,493.84
Yarmouth	699.73	839.67	979.62	1,119.57	1,259.51	1,539.40	1,819.29	2,099.19	2,519.02
Unparished	685.62	822.75	959.87	1,097.00	1,234.12	1,508.37	1,782.62	2,056.87	2,468.24

88. POLITICAL PROPORTIONALITY

The Council considered a report submitted by the Chief Executive Officer with regard to the latest considerations concerning the allocation of seats to political groups following the resignation Mr Fox from the Island First Group and Mr Lillywhite from the Conservative Group but not joining any other Group.

The recommendation was moved and seconded and it was:

RESOLVED:

(a) THAT Council approve the political distribution for Committees as set out in Appendix A.

(b) THAT the distribution of seats across the Committees be set out in Appendix B and that the various seats be filled in accordance with the wishes of the various Groups.

(i) Mr Fox to Development Control Committee and the Adult and Community Services Select Committee

(ii) Mr Lillywhite to the Fire and Public Safety Select Committee and the Licensing Committee as an Independent and to the Development Control Committee on behalf of the Conservative Group.

88. EXECUTIVE

(a) Reports Of The Portfolio Holders

(i) The Leader

The Leader replied to an oral question relating to the Fire Service. The Leader replied to an oral question regarding the achievements of Roger Prowse in the sport of rowing and agreed to send out a letter of congratulations from the Chairman and Leader. In answer to an oral question regarding ASBOS it was arranged that a reply would be given to the Member.

(ii) The Deputy Leader and Transport

The Deputy Leader was asked an oral question regarding car parking in Seaview Village and agreed to enquire into the matter.

(iii) Adult and Community Services

The Portfolio Holder gave an oral update.

The Portfolio Holder answered a number oral questions concerning communications between Adult and Community Services and Environment Services, and the development of a terrace at Ventnor Botanical Gardens.

(iv) Tourism and Leisure

Miss Humby submitted a written question regarding car parking policy at The Heights Leisure Centre, MQ11/05. The Portfolio Holder gave a reply.

A copy of the question and reply are contained in the Members’ Question Register.

The Portfolio Holder circulated a written report.

The Portfolio Holder answered a number of oral questions relating to the process in deciding the Olympic venue for sailing included in the current 2012 London Olympic bid. The Portfolio Holder was asked an oral question concerning how information regarding local meetings is cascaded to Members so that they are kept informed of what is happening in their wards. The Chief Executive Officer agreed to refer to the protocol towards keeping Members informed and to confirm the protocol to Members.

(v) Sustainable Development, Environment and Planning Policy

The Portfolio Holder circulated a written report.

The Portfolio Holder answered an oral question on expenditure to the Council in anticipation of a proposed planning application for a wind farm at Wellow.

(vi) Resources

The Portfolio Holder had no report at this stage for the Council.

(vii) Fire Emergency Planning and Consumer Protection

The Portfolio Holder gave an oral update to Members.

The Portfolio Holder answered a number of questions relating to responsible dog ownership and the Fire Brigade.

(viii) Economic Development, UK and EU, Regional Issues

The Portfolio Holder gave an oral update

(ix) Children’s Services

The Portfolio Holder gave an oral update

The Portfolio Holder answered a number of questions concerning the extended schools initiative and the consultation process with the local community. In reply to an oral question the Portfolio Holder confirmed that the Council had not had to pay the costs of the Consultants Four S. The Portfolio Holder replied to a number of oral questions concerning road safety for children attending local schools.

The meeting closed at 14:20

CHAIRMAN

APPENDIX 1

	TOTAL EXPENDITURE AND PARISH PRECEPTS

a)	£267,719,861	being the aggregate of the amounts which the Council estimates for
		the items set out in Section 32(2)[a] to [e] of the Act, which includes
		Parish and Town Council Precepts totalling £713,616 which are detailed at (e) below.


b)	£98,769,245	being the aggregate of the amounts which the Council estimates for
		the items set out in Section 32(3)[a] to [c] of the Act.

c)	£168,950,616	being the amount by which the aggregate at (a) above exceeds the
		aggregate at (b) above, calculated by the Council, in accordance with
		Section 32(4) of the Act, as its budget requirement for the year, which includes £713,616 in respect of Parish and Town Council Precepts and a Collection Fund surplus of £212,000.



d)	£109,537,471	being the aggregate of the sums which the Council estimates will be
		payable for the year into its General Fund in respect of redistributed
		Non-Domestic Rates, Revenue Support Grant or additional grant and
		calculated in accordance with the Collection Fund (General)(England)
		Direction 2004 and the Local Authorities (Alteration of Requisite
		Calculations)(England) Regulations 2004.

e)	Parish & Town Council Precepts
	Arreton		9.36
	Bembridge		33.62
	Brading		35.17
	Brighstone		10.58
	Calbourne		17.83
	Chale		22.92
	Cowes		17.69
	East Cowes		22.85
	Freshwater		20.57
	Gatcombe		16.16
	Godshill		14.70
	Gurnard		24.62
	Lake		18.43
	Nettlestone & Seaview		13.59
	Newchurch		7.77
	Niton & Whitwell		11.35
	Rookley		19.00
	Sandown		27.59
	Shalfleet		13.95
	Shanklin		14.88
	Shorwell		11.00
	St Helens		17.92
	Totland		23.07
	Ventnor		30.24
	Wootton		24.36
	Wroxall		12.80
	Yarmouth		25.39

			being the amounts precepted by Parish and Town Councils divided by
			the amounts of their respective Taxbase.

f)	£1,133.98		being the amount at [c] above less the amount at [d] above, all divided
			by the amount of its Taxbase, calculated by the Council in accordance
			with Section 33(1) of the Act as the basic amount of its Council Tax
			for the year.

g)	£1,120.36		being the amount at [c] above net of Parish and Town Council Precepts
			less the amount at d) above, all divided by the amount of its Taxbase
			calculated by the Council in accordance with Section 33(1) of the Act
			as the basic amount of its Council Tax for the year for those parts of
			its area to which no Parish and Town Council Precepts relate.

h)	Part of the Council's Area		£
	Arreton		1,129.72
	Bembridge		1,153.98
	Brading		1,155.53
	Brighstone		1,130.94
	Calbourne		1,138.19
	Chale		1,143.28
	Cowes		1,138.05
	East Cowes		1,143.21
	Freshwater		1,140.93
	Gatcombe		1,136.52
	Godshill		1,135.06
	Gurnard		1,144.98
	Lake		1,138.79
	Nettlestone & Seaview		1,133.95
	Newchurch		1,128.13
	Niton & Whitwell		1,131.71
	Rookley		1,139.36
	Sandown		1,147.95
	Shalfleet		1,134.31
	Shanklin		1,135.24
	Shorwell		1,131.36
	St Helens		1,138.28
	Totland		1,143.43
	Ventnor		1,150.60
	Wootton		1,144.72
	Wroxall		1,133.16
	Yarmouth		1,145.75
	Unparished		1,120.36

	being the amounts given by adding to the amount at (g) above the amounts of the Parish and Town
	Council Precepts relating to dwellings in those parts of the Council's area contained at (e) above,
	calculated by the Council, in accordance with Section 34(3) of the Act, as the basic amounts of its
	Council Tax for the year for dwellings in those parts of its area which are parished.

I)	Valuation Bands - Parts of the Council's Area

	As detailed below, the amounts given by multiplying the amounts at paragraph (h) above by the
	number which, in the proportion set out in Section 5(1) of the Act, is applicable to dwellings listed
	in a particular valuation band divided by the number which in that proportion is applicable to dwellings
	listed in valuation band, calculated by the Council in accordance with section 36(1) of the Act, as the
	amounts to be taken into account for the year in respect of categories of dwellings listed in different
	valuation bands.

Council Tax Banding Calculation 2005/06
Excluding Police Precept (Appendix 1)

	A	A	B	C	D	E	F	G	H
	(Disabled
	Reduction)
Arreton	627.62	753.15	878.67	1,004.20	1,129.72	1,380.77	1,631.82	1,882.87	2,259.44
Bembridge	641.10	769.32	897.54	1,025.76	1,153.98	1,410.42	1,666.86	1,923.30	2,307.96
Brading	641.96	770.35	898.75	1,027.14	1,155.53	1,412.32	1,669.10	1,925.89	2,311.06
Brighstone	628.30	753.96	879.62	1,005.28	1,130.94	1,382.26	1,633.58	1,884.90	2,261.88
Calbourne	632.33	758.79	885.26	1,011.73	1,138.19	1,391.12	1,644.05	1,896.99	2,276.38
Chale	635.16	762.19	889.22	1,016.25	1,143.28	1,397.34	1,651.41	1,905.47	2,286.56
Cowes	632.25	758.70	885.15	1,011.60	1,138.05	1,390.95	1,643.85	1,896.75	2,276.10
East Cowes	635.12	762.14	889.16	1,016.19	1,143.21	1,397.26	1,651.30	1,905.35	2,286.42
Freshwater	633.85	760.62	887.39	1,014.16	1,140.93	1,394.47	1,648.01	1,901.55	2,281.86
Gatcombe	631.40	757.68	883.96	1,010.24	1,136.52	1,389.08	1,641.64	1,894.20	2,273.04
Godshill	630.59	756.71	882.83	1,008.94	1,135.06	1,387.30	1,639.53	1,891.77	2,270.12
Gurnard	636.10	763.32	890.54	1,017.76	1,144.98	1,399.42	1,653.86	1,908.30	2,289.96
Lake	632.66	759.19	885.73	1,012.26	1,138.79	1,391.86	1,644.92	1,897.99	2,277.58
Nettlestone & Seaview	629.97	755.97	881.96	1,007.96	1,133.95	1,385.94	1,637.93	1,889.92	2,267.90
Newchurch	626.74	752.09	877.44	1,002.78	1,128.13	1,378.83	1,629.52	1,880.22	2,256.26
Niton & Whitwell	628.73	754.47	880.22	1,005.97	1,131.71	1,383.20	1,634.69	1,886.19	2,263.42
Rookley	632.98	759.57	886.17	1,012.77	1,139.36	1,392.55	1,645.74	1,898.94	2,278.72
Sandown	637.75	765.30	892.85	1,020.40	1,147.95	1,403.05	1,658.15	1,913.25	2,295.90
Shalfleet	630.17	756.21	882.24	1,008.28	1,134.31	1,386.38	1,638.45	1,890.52	2,268.62
Shanklin	630.69	756.83	882.97	1,009.10	1,135.24	1,387.52	1,639.79	1,892.07	2,270.48
Shorwell	628.53	754.24	879.95	1,005.65	1,131.36	1,382.77	1,634.19	1,885.60	2,262.72
St Helens	632.38	758.85	885.33	1,011.81	1,138.28	1,391.23	1,644.18	1,897.14	2,276.56
Totland	635.24	762.29	889.34	1,016.38	1,143.43	1,397.53	1,651.62	1,905.72	2,286.86
Ventnor	639.22	767.07	894.91	1,022.76	1,150.60	1,406.29	1,661.98	1,917.67	2,301.20
Wootton	635.96	763.15	890.34	1,017.53	1,144.72	1,399.10	1,653.49	1,907.87	2,289.44
Wroxall	629.53	755.44	881.35	1,007.25	1,133.16	1,384.97	1,636.79	1,888.60	2,266.32
Yarmouth	636.53	763.83	891.14	1,018.45	1,145.75	1,400.36	1,654.97	1,909.59	2,291.50
Unparished	622.42	746.91	871.39	995.88	1,120.36	1,369.33	1,618.30	1,867.27	2,240.72

Revised 2004-05

Base 2005-06

Priority Bids

Schools passporting

Social Services pressures

Gershon savings

Other reductions

Draft budget 2005-06

£000

£000

Housing benefits + corporate items

2,543.1

3,013.5

-59.7

-48.5

2,905.3

Corporate Services Directorate

245.3

233.6

0.0

233.6

Legal & Democratic

1,011.5

998.4

-57.9

-20.0

920.4

Human Resources & Training

966.9

958.9

-0.4

-58.1

900.3

Policy & Communications

1,607.0

1,589.5

-27.9

-104.4

1,457.3

Select Committee Support

315.9

338.9

-15.1

323.8

Finance & Business

2,145.0

2,298.8

-162.0

2,136.8

Organisational Development

2,741.9

2,317.0

-3.0

-72.7

2,241.3

Education

66,932.2

69,456.2

1,155.0

-28.0

-291.0

70,292.2

Children & Family Services

9,304.0

9,056.2

-5.9

-100.0

8,950.2

Leisure

1,762.7

1,743.4

-101.7

1,641.7

Property Services

232.2

246.8

-5.2

-39.7

201.8

Planning

1,644.1

1,803.6

-48.2

-72.0

1,683.3

Engineering

14,060.7

14,447.5

80.0

-9.8

-309.3

14,208.4

Consumer Protection

1,639.7

1,715.5

-32.4

-41.0

1,642.1

Tourism

1,399.7

1,146.2

-1.1

-150.0

995.0

Economic Development

292.2

245.5

-0.1

245.4

Fire & Rescue

5,684.6

5,833.2

329.1

-40.8

6,121.5

Emergency Planning

65.4

163.8

20.0

-0.2

183.5

Adult Social Services

26,468.5

29,328.7

275.0

1,031.0

-182.3

-152.0

30,300.5

Safer communities

350.4

284.9

-0.1

284.7

Community Development

3,301.6

3,385.8

-94.6

-85.0

3,206.2

Housing

1,744.1

1,690.6

-2.7

-20.0

1,667.9

Building Maintenance

1,099.9

-50.0

1,049.9

Precepts e.t.c.

1,512.3

1,328.3

1,328.3

Capital Financing

10,789.7

12,616.7

12,616.7

Other financing

-2,065.0

710.7

710.7

Total Expenditure

157,795.7

168,051.9

704.1

1,155.0

1,031.0

-879.3

-1,613.7

168,449.0

Three Year Tax Projection
		2005-06	2006-07	2007-08
		£000	£000	£000

Draft Budget 2005-06		168,449	168,449	168,449

Pay and price inflation			5,456	11,523
Pension contributions			913	1,754
Capital financing costs			1,515	3,197
Education pressures/passporting			2,297	4,022
Social Services pressures			76	76
Waste management/Landfill Tax			150	300

Children's services bids			75	75
Funding changes			1,454	1,454
Other items			66	76
Net savings, full year effect			-131	-131
RSG clawback in 2005-06			-514	-514

Savings to be found			-4,149	-5,135

Net expenditure		168,449	175,657	185,147

Revenue Support Grant and business rates		109,537	113,589	119,499
Withdrawal from reserves		0	0	0

Council Tax yield		58,911	62,068	65,648

Tax base (band D equivalents)		52,393.40	52,762	53,146
Collection Fund surplus		212	0	0
	2002-03
Band D Council Tax	###	1,120.36	1,176.38	1,235.23
Tax increase (%)	###	4.30	5.0	5.0


1% change in tax base		563	591	625

Tax without unidentified savings		4.30	12.0	6.6

APPENDIX 4

PRUDENTIAL INDICATORS

The prudential framework for self-management of capital finance focuses upon the following elements:

Capital expenditure plans
External debt
Treasury management

The prudential indicators are designed to support and record local decision making in these three areas.

In the Prudential Code, the indicators are set out according to whether they are indicators of affordability or prudence. This is necessary for an understanding of the role each indicator plays in the overall decision-making framework. The indicators are listed below:

Prudential indicators for affordability

- Estimate of the incremental impact of capital investment decisions upon Council Tax. It is important to note that all associated borrowing is supported and any saving through not undertaking the programme would be a one off, as a result of the probable loss of FSS for later years.

- Ratio of financing costs to net revenue stream

Prudential indicators for Prudence

- Net borrowing and the capital financing requirement

- Confirmation that treasury management is carried out in accordance with good professional practice

- External debt within prudential and sustainable limits

Prudential indicators for capital expenditure, external debt and treasury management

Capital Expenditure

- Estimates of Capital expenditure

- Capital financing requirement

External Debt

- Authorised limit

- Operational boundary

Treasury Management

- Interest rate exposures

- Maturity structure of borrowing

- Total principal sums invested for periods in excess of 364 days

The prudential indicators are not designed to be comparative performance indicators, and to use them in this way would be misleading. It is only intended that they be used to measure performance within the authority over time. It also needs to be borne in mind that the indicators need to be considered collectively, rather than individually.

NOTES

1. Ratio of financing costs to net revenue stream is the total of capital financing costs divided by the Councils total income from Council Taxpayers and Government Grants as contained in its Consolidated Revenue account

2. The Capital Financing Requirement (CFR) is a new measure introduced by the Prudential Code, which represents the amount of capital spending which has yet to be financed.

3. The operational boundary for external debt represents the maximum level of borrowing that the Council is planning to have outstanding from its spending plans. The authorised limit on borrowing is set at a higher level in order to cover any unavoidable and unforeseen borrowing that may become necessary due to adverse cash flow movements.

The following sets out, for approval, the mandatory indicators recommended by the Prudential Code –

Indicator	Basis	Period	Definition	SCC Methodology	Unit	2005/06	2006/07	2007/08
Affordability
Estimates of ratio of financing costs to net revenue stream	Estimate	Years 1, 2 and 3	Estimate of financing costs / estimate of net revenue stream x 100%	Interest payable re. borrowing + interest payable re. finance leases + gains/losses on early settlement of borrowing - interest on investments + MRP	%	7.53%	8.10%	8.77%
Estimates of the incremental impact of capital investment decisions on Council Tax	Estimate	Years 1, 2 and 3 (and longer as necessary)	(i) forecast the total budgetary requirements for the authority based on no changes to the existing capital programme	(i) Council Tax requirement under existing plans	£ per Band D Equivalent	9.44	45.93	85.17
			(ii) forecast the total budgetary requirements for the authority with the changes proposed to the capital programme	(ii) Council tax requirement including proposed capital scheme	%	0.95%	4.61%	8.55%
			(iii) addition or reduction to Council Tax as a result of the difference between (i) and (ii)	(ii) - (i)	%	0.95%	4.61%	8.55%
Capital Expenditure
Estimates of capital expenditure	Estimate	Years 1, 2 and 3 (and longer as necessary)	Estimate of total capital expenditure to be incurred	Capital budgets	£000	25,607	31,691	19,429
Estimates of capital financing requirement (CFR)	Estimate	Years 1, 2 and 3	Estimate of underlying need for credit as at the end of years 1, 2, 3	Fixed assets + deferred charges + FARR + Capital Financing Reserve + government grants deferred + credit arrangements	£000	164,793	184,663	191,041
External Debt
Authorised limit (for borrowing)	Estimate	Years 1, 2 and 3	Authorised limit for borrowing.	Estimates of borrowing + other long term liabilities (3rd party balances, provisions, amounts outstanding on leases, government grants deferred and other contributions deferred)	£000	181,000	203,000	210,000
Authorised limit (for other long term liabilities)	Estimate	Years 1, 2 and 3	Authorised limit for other long term liabilities	Estimates of borrowing + other long term liabilities (3rd party balances, provisions, amounts outstanding on leases, government grants deferred and other contributions deferred)	£000	10,000	10,000	10,000
Authorised limit (for total external debt)	Estimate	Years 1, 2 and 3	Authorised limit for borrowing + authorised limit for other long term liabilities	Estimates of borrowing + other long term liabilities (3rd party balances, provisions, amounts outstanding on leases, government grants deferred and other contributions deferred)	£000	191,000	213,000	220,000
Operational boundary (for borrowing)	Estimate	Years 1, 2 and 3	Operational boundary for external debt	As above less contingency provision.	£000	165,000	185,000	191,000
Operational boundary (for other long term liabilities)	Estimate	Years 1, 2 and 3	Operational boundary for external debt	As above	£000	10,000	10,000	10,000
Operational boundary (for total external debt)	Estimate	Years 1, 2 and 3	Operational boundary for external debt + operational boundary for other long term liabilities	As above	£000	175,000	195,000	201,000
Treasury Management
Adoption of the CIPFA Code of Practice for Treasury Management in the Public Services			The Local Authority has adopted CIPFA's Code of Practice		ADOPTED FEBRUARY 2003	ü	ü	ü
Fixed interest rate exposure - upper limit	Estimate	Years 1, 2 and 3	Interest payable on borrowing at fixed rates - interest receivable on fixed rate investments or principal sums outstanding in respect of borrowing at fixed rates - principal sums outstanding in respect of investments at fixed rates	Upper limit	%	100%	100%	100%
Variable interest rate exposure - upper limit	Estimate	Years 1, 2 and 3	Interest payable on borrowing at variable rates - interest receivable on variable rate investments or principal sums outstanding in respect of borrowing at variable rates - principal sums outstanding in respect of investments at variable rates	Upper limit	%	20%	20%	20%
Maturity structure of borrowing (upper and lower limits)	Estimate	All years	Amount of projected borrowing that is fixed rate maturing in each period / total projected borrowing that is fixed rate x 100%	Ranges for each period		See below	See below	See below
Total principal sums invested for periods longer than 364 days	Estimate	All years	Total principal sum invested to final maturities beyond the period end		£000	10,000	10,000	10,000

Maturity Structure of Borrowing		2005-06	Future Years
Period	Upper Limit	Lower Limit	Upper Limit	Lower Limit
Under 12 months	10%	0%	10%	0%
12 months and within 24 months	10%	0%	10%	0%
24 months and within 5 years	20%	0%	20%	10%
5 years and within 10 years	50%	25%	50%	25%
10 years and above	95%	50%	95%	50%

APPENDIX 5

Capital Programme 2005 / 2008

The Supported Capital Expenditure (SCE) that is applicable to the 2005/06 financial year is allocated to services as detailed below.

Education 3,385,000

Highways 5,941,000

Housing 1,769,000

Social Services 112,000

Fire Service 123,000

Ventnor Landslip 275,000

11,605,000

In addition to the above are the Highways allocations specific to the Ryde Interchange and the Undercliff Drive, and those applicable to approved Coast Protection Schemes.

The following expenditure programme for 2005/06 and 2006/07, which falls outside of Supported Capital Expenditure (SCE), are to be financed from capital receipts, and where approved by the Council in February 2004. The presented programme for 2007/08 represents a continuation of these expenditure levels.

Bid	2005/6	2006/7	2007/8
1. Acquisition of Land at Pan	£200,000	£200,000	£200,000
2. Maintenance of buildings, including Disability Discrimination Act	£300,000	£300,000	£300,000
3. Cemeteries	£50,000	£50,000	£50,000
4. Cliff Falls, Landslip etc	£100,000	£100,000	£100,000
5. Community Development	£250,000	£250,000	£250,000
6. Housing Disabled Facilities Grant	£240,000	£240,000	£240,000
	£1,140,000	£1,140,000	£1,140,000

Notes:

1. Already approved by Executive as part of the Capital Investment Strategy for Pan.

2. Essential works to meet legal requirements, Health & Safety and priorities or objectives for service delivery.

3. The establishment of an annual budget to address a backlog of essential repairs and associated risk.

4. This sum is considered as necessary provision to meet unforeseen costs associated with cliff falls and landslips.

5. This budget is for prioritisation by the relevant Strategic Director to address Health and Safety issues, and ensure the maintenance of revenue income streams from leisure facilities etc.

6. This is the Council’s anticipated funding share of an expenditure programme which attracts 60% Government Grant. The programme enables the provision of basic facilities to accommodate the needs of disabled people in their own homes.

APPENDIX 6 TREASURY STRATEGY 2005-2006

1. TREASURY POLICY

This Strategy is pursuant to the Treasury Policy and in accordance with CIPFA’s revised Code of Practice for Treasury Management in Local Authorities, and Treasury Management Practices (TMP) as adopted by the Council in February 2003.

2. TREASURY MANAGEMENT

The Council’s Treasury Management activities include the following:-

· Cash Flow (daily balances and longer term forecasting)

· Investing surplus funds

· Borrowing to finance day to day cash fluctuations

· Funding of capital investment through borrowing, capital receipts, grants or leasing

· Management of debt (including restructuring and monitoring an even maturity profile)

· Interest rate exposure management

· Dealing procedures with brokers, banks and the Public Works Loan Board (PWLB).

3. ANNUAL INVESTMENT STRATEGY

3.1 Under the powers of the Local Government Act 2003 the Secretary of State has now issued guidance on local authority investments. Local Authorities are required under the Act to have regard to this guidance, which recommends that an Annual Investment Strategy should be approved each year by Full Council. The guidance does not apply to pension and trust funds, which are covered by a completely separate regulatory regime. A copy of the guidance from the Office of the Deputy Prime Minister (ODPM) is attached to this paper.

3.2. The general policy objective of the guidance is that local authorities should invest prudently the surplus funds held on behalf of their communities. Priority is given to the security and liquidity of funds, but this should not mean that yield is ignored. It is necessary as under previous regulations to seek the highest rate of return consistent with proper levels of risk and security.

3.3. The guidance provides for a concept of specified and non-specified investments. A Specified Investment is one with a term no longer than 364 days which is made with a body or scheme which has been awarded a high credit rating by an approved credit rating agency. The two such agencies used by the Isle of Wight Council are included in those recommended by the Secretary of State. It is proposed that as part of this Council’s Investment Strategy that the approved organizations for specified investments are as set out in Schedule One to this Appendix and that the associated credit ratings are monitored on an ongoing basis.

3.4. With regard to Non Specified Investments for 2005/06, these could be used to add wider flexibility and improved returns on the current investment portfolio, without the addition of any significant risk. In order to determine approved bodies for unspecified investments, this could be achieved by limiting it to those bodies approved for specified investments who also satisfy the top credit ratings for longer term investments (those classified Aa or above). It is proposed that such investments should be limited to a maximum of £5 million with any one organisation for a period of up to three years. In addition specified investments should not exceed 25% of the investment portfolio at the time of the investment.

3.5. Credit ratings are monitored on an ongoing basis with any changes reported to the Chief Financial Officer or Financial Services Manager. The Chief Financial Officer is responsible for the implementation of the Investment Strategy and it is proposed that the authority to enact any changes, consistent with approved credit ratings be delegated to the Chief Financial Officer.

3.6. The current policy is that the investment of surplus funds is limited to:

Major British Clearing Banks and Subsidiaries

Larger Merchant Banks

Top Building Societies

Other Local Authorities

Approved Money Market Funds

3.7. The Council will also use Pooled money resources that may become available through the auspices of approved organisations for Investment, as contained above and to include H M Treasury. The limit of such investment to be placed at £8 million per each approved source and varied at the discretion of the Chief Financial Officer. The exercise of such discretion to be reported to the Executive as part of the Annual Reporting requirement as contained under TMP6.

4. BORROWING STRATEGY

4.1. The objectives of the strategy will be:

a) To minimise the revenue costs of debt

b) To manage the Council’s debt maturity profile, i.e. to leave no one future year with a high level of repayments that could cause problems in re-borrowing

c) To affect funding in any one year at the cheapest cost commensurate with future risk

d) To forecast average future interest rates and borrow accordingly (i.e. short term and/or variable when rates are “high”, long term and fixed when rates are “low”). Similarly maturity loans can be taken when rates are relatively low, to lock in the principal for the maximum period, and possibly annuity loans or equal installments of principal loans when rates are considered higher.

e) To monitor and review the level of variable interest rate loans in order to take advantage of interest rate movements.

f) To restructure debt in order to take advantage of potential savings as interest rates change.

4.2. FORECAST OF INTEREST RATES FOR 2004-2005

Bank base rate has been held at 4.75% since August 2004 following five successive increases of one quarter per cent since November 2003. There is currently mixed feeling among commentators as to whether the next movement will be up or downward. There is a consensus that rates are likely to stay on hold into the next financial year.

1) The Prudential Code requires the Council to fix each year the maximum proportion of interest on borrowing which is subject to variable rate interest.

2) In order to take advantage where appropriate of low short-term interest rates it is proposed that for the financial year 2005-2006.

the limit on the proportion of interest payable by the Council which is at a rate or rates which can be varied by the person to whom it is payable or by reference to any external factors be 20%.

4.3. STRATEGY

The strategy will in general be:

i to borrow long term when interest rates are relatively low and to borrow short term when interest rates are judged to be high.

ii to keep a reasonable balance between short term and long term loans so that

o there is not an unreasonable exposure to short term loans with corresponding risk of increased interest charges; or

o over reliance on long term loans which could restrict flexibility in renewing debt at advantageous interest rates.

iii to aim generally to be in a net day to day borrowing position so that the need for investment of temporary excess funds is avoided as far as possible.

This will be subject to variation in order to take advantage where appropriate of prevailing market conditions.

For 2005-2006 the strategy will be to continue to borrow medium to long term at fixed interest rates, having regard to the low interest rates that are currently available.

4.4. DEBT RESTRUCTURING

To use available PWLB quota to take advantage of opportunities to redeem PWLB debt or convert from fixed to variable rates or vice versa and replace debt so as to smooth the pattern of debt repayment and/or minimise overall long term capital financing costs. Consideration will be given to the availability and attractiveness of loans other than PWLB for debt restructuring purposes.

4.5. APPROVED BORROWING INSTRUMENTS

The following list specifies which borrowing instruments, on and off-balance sheet, can be adopted. Only those marked a are currently used by the Council.

Fixed Variable

PWLB a a

Market Long-term a a

Market Pooled Funds a a

Market Temporary a a

Local Bonds

Overdraft a

Negotiable Bonds

Stock Issues

Internal (capital receipts and a a

revenue balances)

Leasing a a

Bills

5. SOURCES OF FINANCING

The following specifies which borrowing instruments the Council may adopt.

5.1 PUBLIC WORKS LOAN BOARD (PWLB)

The main source of longer term borrowing for the Council for many years has been from the Government through the Public Works Loan Board.

It is still likely that the PWLB will remain the major source of the Council’s long term borrowing requirements. The 2005-2006 quota for the Council is estimated to be £17.8 million.

5.2. MONEY MARKET LOANS - LONG TERM AND POOLED FUNDS

The availability of PWLB loans has become easier and their rates of interest are expected to remain competitive. Loans are also available through the London money market in particular longer term loans (40 years) which carry a low initial period of interest, but where the lender has the option to raise the rate after this period. If that option is taken, the Council is free to repay if it so chooses without penalty. These Lenders Option: Borrowers Option (LOBO) loans carry the necessary security ratings and can be an effective complement to PWLB borrowing in structuring the loan portfolio and debt rescheduling.

5.3. OVERDRAFT & TEMPORARY LOANS

An overdraft limit of £3m is available with the Council’s bankers. This facility will be used on occasions when temporary borrowing is difficult, or for amounts of under £250,000 wherever the transaction costs outweigh any benefits from using the money market.

5.4. INTERNAL

Internal funds include “reserved” or “set-aside” capital receipts which are to be used to repay debt as a substitute for new borrowing. There is no provision in legislation to compel authorities to use such receipts in the year they are received, and those funds are normally used internally thereby reducing the need for external borrowing but they could be externalised and new borrowing taken up if conditions merit such an approach.

6. POLICY ON EXTERNAL ADVISERS

6.1. Treasury Advisers have been employed by the Council to:

· forecast movements in long term and short term interest rates

· advise on long term borrowing and debt maturity profiles

· advise on leasing and capital finance legislation

· restructuring of PWLB debt

· advise on future interest rate movements (including PWLB) and other market developments

The Chief Financial Officer has responsibility for the review of future provision of such advice, and to amend the conditions or appoint different advisers as appropriate.

Isle of Wight Council APPENDIX A

COMMITTEES / PANEL

READY RECKONER

No of Seats	Island 1st	Cons.	Lab.	A	B	C	D	E	F	G	H	I
3	2	1	-	-	-	-	-	-	-	-	-	-
4	2	1	1	-	-	-	-	-	-	-	-	-
5	3	1	1	-	-	-	-	-	-	-	-	-
6	3	2	1	-	-	-	-	-	-	-	-	-
7	4	2	1	-	-	-	-	-	-	-	-	-
8	4	3	1	-	-	-	-	-	-	-	-	-
9	5	3	1	-	-	-	-	-	-	-	-	-
10	5	3	1	1*	1*	1*	1*	1*	1*	1*	1*	1*
11	6	3	1	1*	1*	1*	1*	1*	1*	1*	1*	1*
12	6	4	1	1*	1*	1*	1*	1*	1*	1*	1*	1*
13	7	4	1	1*	1*	1*	1*	1*	1*	1*	1*	1*
14	7	4	1	2+	2+	2+	2+	2+	2+	2+	2+	2+
15	8	4	1	2+	2+	2+	2+	2+	2+	2+	2+	2+
16	8	5	1	2+	2+	2+	2+	2+	2+	2+	2+	2+
17	8	5	2	2+	2+	2+	2+	2+	2+	2+	2+	2+
18	8	6	2	2+	2+	2+	2+	2+	2+	2+	2+	2+
19	9	6	2	2+	2+	2+	2+	2+	2+	2+	2+	2+
20	9	6	2	3=	3=	3=	3=	3=	3=	3=	3=	3=
21	10	6	2	3=	3=	3=	3=	3=	3=	3=	3=	3=
22	11	6	2	3=	3=	3=	3=	3=	3=	3=	3=	3=
23	11	6	2	4$	4$	4$	4$	4$	4$	4$	4$	4$
24	11	7	2	4$	4$	4$	4$	4$	4$	4$	4$	4$
25	12	7	2	4$	4$	4$	4$	4$	4$	4$	4$	4$

Island 1^st Group : 23 members

Conservative Group : 13 members

Labour Group : 3 members

Mrs Foster (A) : 1 member

Mr Mazillius (B) : 1 member

Mr Bowker (C) : 1 Member

Mrs Lawson (D) : 1 Member

Mr Bartlett (E) : 1 Member

Mr Yates (F) : 1 Member

Miss Humby (G) : 1 Member

Mr Fox (H) : 1 Member

Mr Lillywhite (I) : 1 Member

1* these seats have to be shared between these nine groups

2+ two from these nine groups

3= three from these nine groups

4$ four from these nine groups

APPENDIX B

Feb 2005

PROPORTIONALITY ACROSS COMMITTEES

	Total No. of Seats	Island First	Con.	Labour	Mrs Foster	Mr Mazillius	Mr Bowker	Mrs Lawson	Mr Bartlett	Mr Yates	Miss Humby	Mr Fox	Mr Lillywhite
Executive (NOT Proportionate)	10	10	0	0	0	0	0	0	0	0	0	0	0

Licensing	10(+4)	6	4	1+					1		1		1
Development Control	14(+6)	9	6 w	1	1			1		1		1
Regulatory Appeals Committee	15	8	4	1		1*	1#
Children’s Services	9	5$	3	1
Adult and Community Services	9	4	2	1		1						1
Environment, Transport etc	9	5	4	0
Economic Development etc	9	4	2	1			1		1
Resources	9	4	2	1				1		1
Fire and Public Safety	9	4	2	0	1						1		1
Standards	2(+3)	3	1	1
HR Committee	7	4	2	1

+ filled by Mr Mazillius on behalf of the Labour Group.

$ a seat filled by Mr Mazillius on behalf of the Island First Group.

# allocated to Mr Bowker but not filled at his request.

* allocated to Mr Mazillius but he has now resigned from this committee.

w...a seat filled by Mr Lillywhite on behalf of the Conservative Group.